Free Software IF

Free Software IF is interactive fiction that is released under a license that gives the user:

the freedom to run the program for any purpose;
the freedom to study and modify the program;
the freedom to copy the program;
the freedom to improve the program, and release your improvements to the public.

Since modifying a program requires access to its source code, free software is automatically also open source software. The reverse is not automatically true: if an author were to release the source code to his game under a Creative Commons Attribution-Non-Commercial-No Derivative Works 3.0 license, for instance, the game would be open source but not free (since distribution of derivative works is not permitted). As another example, the Creative Commons Attribution-Noncommercial-Share Alike 3.0 Unported license is also not a free software license, since it does not allow people to use the code in certain works, namely commercial ones.

Free software is distinct from freeware, which is software made available free of charge but which usually can't be modified by the users. The word free in "free software" means free as in freedom, but in "freeware", it means free of charge.

Interactive Fiction released under a Free Software License

GNU General Public License

The most used free software license if the GPL, which is maintained by the Free Software Foundation. The GPL is a copyleft license, which means that all derative works have to be licensed under the GPL as well. This ensures that all derative works are also free software.

GPL version 2

The GPL version 2 was released in 1991. Interactive Fiction released under this license includes:

The Baron by Victor Gijsbers, Inform 6 (competition release; with 'or any later version' designation). Ask the author if you want the source (see talk page).
The Magic Toyshop by Gareth Rees, Inform 6 (with 'or any later version' designation).
Unholy Grail by Stuart Allen, JACL (Release 2, included with JACL language under same license on Sourceforge).

GPL version 3

The GPL version 3 was released in 2007 to address the issues of software patents, hardware restrictions on software modification ("tivoization"), compatibility with other free software licenses, and internationalization. Interactive Fiction released under this license includes:

Fate by Victor Gijsbers, Inform 7 (the competition release reads 'version 2 or any later version').
Figaro by Victor Gijsbers, Inform 7.
Iraqi Invasion by Anonymous, Inform 7. (With 'or any later version' designation. It is uncertain whether the author actually can release this work under the GPL, since it incorporates text copyrighted by Matthew Baldwin. This text is used "by permission", but the extent of the permission is not made clear, and the author "strongly recommends you seek additional permission from Mr. Baldwin before making changes that would cause any deviation from the standard transcript".)
Spaceship! by The Guardian's Gamesblog Community, Inform 7.

BSD Licences

BSD licenses represent a family of permissive free software licences. The licenses have few restrictions compared to other free software licenses such as the GNU General Public License or even the default restrictions provided by copyright, putting it relatively closer to the public domain.

Lieux Communs by JB, Samuel Verschelde, Eric Forgeot, Hugo Labrande, and Jean-Luc Pontico
Le Temple de Feu by Eric Forgeot
La route des vins by Eric Forgeot
Rats by Rémi Verschelde

Home-brew Licences

These programs are released under licenses that the author's have written themselves. As such, details may vary and a careful reading of the license text is necessary.

Ditch Day Drifter by Michael J. Roberts, ported by Chris Markwyn to Inform 5.5. ("If anyone wants to finish it off, feel free." Not sure if the original is released under a free license, though.)
Night at the Computer Center by Bonni Mierzejewska, Inform 6. ("All rights freely given away, except you may not distribute a modified night.z5 as if it were from me. Ya gotta put yer own name on it, and ya gotta give credit where it's due.")
The Night of the Vampire Bunnies by Jason Dyer, ported by Patrick Kellum to Inform 6. (Patrick Kellum's code can be used freely, and the license information at least implies that the same holds for Jason Dyer's text and layout.)

Public Domain

Some works are designated 'public domain'. On a plausible interpretation, this means that the author has relinquished all copyright over the work, automatically making the work free software if the source code has been made available.

All Things Devours by half sick of shadows, Inform 6.
Pick Up the Phone Booth and Dye by Eric Schmidt, Inform 6.

IF abuses released under a Free Software License

Some programs written in IF authoring systems are nevertheless not interactive fiction, but (say) implementations of chess or Tetris. Those are generally called abuses, and are listed here separately.

GNU General Public License

GPL version 2

GlkeBook by Simon Baldwin, Inform 6 (with 'or any later version' designation; an eBook reader).
GlkChess by Simon Baldwin, Inform 6 (with 'or any later version' designation; implementation of Chess).
Silicon Castles by David Given, Inform 6 (implementation of Chess).

MIT License

The MIT License is a very short, straightforwardcopyleft free software license. It is GPL-compatible, which means that projects released under the MIT-license can be combined with projects released under the GPL-license. (Since both licenses are copyleft, the resulting work would have to be distributed under the conjunction of the MIT license and the GPL.)

baZic by David Given, Inform 6 (partial implementation of BASIC).

Home-brew Licences

robotfindskitten by Leonard Richardson, ported by David Griffith to Inform 6. ("This code is freely redistributable. Do with it what you will, but don't go about claiming you wrote it." An ASCII-game where you must find kitten.)

Public Domain

Free Fall by Andrew Plotkin, Inform 6 (implementation of Tetris).
The Mad Bomber by Neil James Brown, Inform 6 (implementation of Bomber).